FREE NEWSLETTER
The following is from one of the newsletters I used to send to my clients each year. It is not meant to be comprehensive but it may help the organized challenged people (OCP) among us.
Most of you are probably sick of reading this paragraph because I include it every year. If you are one of my organized peeps you can just skip this one.
Two things to do here. First is to look at the left side of last year’s tax folder (that’s where I attached all of their source documents) to get an idea of what you may need this year. Next thing is to watch the mail for this year’s versions to be delivered. Again, the general rule is to bring me anything with the letters or numbers 1099, 1095, 1098, W2, or K1. Those are the documents you will want to keep together in a dedicated place. I suggest you should have a financial junk drawer, an old shoe box, shopping bag or whatever. Just don’t let the dog, cat, or kids eat them.
Don’t forget, not all tax docs arrive in January. For example, the consolidated 1099 from you broker dealer may not show up until March. The K1’s from your trusts, oil wells, and etc. may not arrive until after Labor Day. You may need to file an extension. If so, remember an extension to file does not change the last day to pay, which is typically April 15.
Are you or the kids in college? Depending on your income you may be eligible for a tuition credit up to $2500. Clients often told me that they didn’t receive this form in the mail. You may have to access your students form 1098T (T as in tuition) on their internet portal at the school.
Other overlooked items are distributions from a Health Savings Accounts, student loan interest, and believe it or not, estimated tax payments. States require information from your driver’s license or state issued ID cards. Don’t forget social security cards for everybody on the tax return. And of course routing and account numbers for refunds or balances due.
Feel free to add to my list if you have some things that work for you.
Many happy returns,
Dan
I would add Capital loss carry forward data, especially if you’re changing tax preparers. That would be included on last year’s tax return as Rick suggested supplying to your preparer. The capital loss can be used to offset capital gains or up to a $3,000 offset of income. A large Capital Loss can be carried forward for as many years needed to use it.
Good addition. I had one poor client who needed to live to about age 120 in order to use up her losses.
Dan, I’ll add…in the case of capital losses for those filing jointly, the carryover benefit only applies to the spouse who owns the asset, if not jointly owned.
A paper file folder, c’mon that is so 1960s. Today, all the CPA’s around here want people to upload their documents directly to their CPA software. All financial institutions provide access to PDF copies of 1099s and other forms. If folks do get a paper form the CPA wants the client to take a photo with their cell phone and upload it. The easy way to handle this is to create an electronic file in whatever cloud you use and download the 1099’s from the broker directly into your cloud folder. Each year, I create an electronic file at Dropbox such as “2024 Year End statements and 1099s”. As they become available I download them into this file. Then when I do my taxes on TurboTax everything is in one location. There is no paper to have been lost misplaced.